Posted on 10/26/2001 8:46:26 PM PDT by Stand Watch Listen
William Niskanen, the chairman of the Cato Institute, expresses grave concern about the expanding powers of government, especially in light of the terrorist attacks.
William Niskanen has served as chairman of the Cato Institute, Washington’s libertarian think tank, since 1985. A microeconomist, Niskanen holds a doctorate from the University of Chicago and served at the Office of Management and Budget (OMB) under President Richard Nixon, as chief economist of the Ford Motor Co. and as a member of President Ronald Reagan’s Council of Economic Advisers.
Insight: Since the terrorist attacks on the World Trade Center and the Pentagon, we’ve been hearing a call nationwide for an increase in governmental powers. How do libertarians react to this call?
William A. Niskanen: It’s been an awkward time for libertarians in the sense that an event that reflects the failure of the government has led to an enormous increase in the fiscal and police powers of the government.
The federal government regulates the security at our airports but failed to do the job. The federal government regulates immigration into the United States but failed to screen out even people known to be associated with terrorist organizations. Now the irony is that the events of Sept. 11 have led to an increased demand for the federal government to do what it already has failed to do.
It’s understandable. Crises of this nature almost always lead to an increase in the relative role of government. Within the government they almost always lead to some centralization of power in the executive.
Our government is supposed to secure life, liberty and property, and we’ll make some trade-offs among these things. We’ll give up a little of our liberty in order to increase the probability that we won’t be subject to a terrorist attack. At the same time, we shouldn’t give the government carte blanche in police or fiscal powers. We should put some kind of deadline on how long these powers last, sunsetting them so that Congress has to justify retaining them after a certain period of time.
;Congress has, I think, been all too willing to give the executive greater discretion on spending money. The $40 billion appropriation to respond to the terrorist attacks has fewer strings attached to it than the bill that authorized expenditures for the Persian Gulf War.
Fiscal and police powers in a time of crisis are hard to vote against, and it’s important that there are people who are willing to take some political risks to challenge them. In this time of crisis, in addition to expanding and centralizing power, we also may see some reversal of what had been a general move toward privatization.
Insight: But centralization of power isn’t anything new in the United States. Even the records of Republican presidents haven’t been all that good, have they?
WAN: One comment I’ve made that surprises people is that the biggest expansion of regulatory power in the postwar years has been under Republican presidents. Richard Nixon and George Herbert Walker Bush presided over the most rapid expansions of federal regulatory powers.
At the same time, we have had a progressive deregulation of the older forms of economic regulation, price controls and the like. Most of the older forms of that which regulated transportation, communication and energy have disappeared. But at the same time there’s been a substantial increase in the regulation of health, safety and the environment.
There’s been another development which I find very disturbing and that has been a progressive grant of authority from Congress to the regulatory agencies. Congress passes regulatory legislation with the most general language in it and then turns over the effective rule-making to the regulatory agencies.
Insight: Why this increase under Republican presidents?
WAN: I was an assistant director of OMB for several years during the Nixon administration. He had no particular convictions on these matters. In retrospect, I think the two smartest men to be president since World War II were Nixon and Bill Clinton, and both disgraced the office. I just think they had no particular principles about what they should do.
During the years of the senior George Bush we had a much tighter Clean Air Act. We had the Americans with Disabilities Act. We got an increase in the minimum wage. And Bush had every reason to know better, having headed the task force on regulatory relief under President Reagan.
Then, during the election of 1992, Bush attempted to take credit for the increase in regulation, as if it were something to be proud of. He said this is who I am — he didn’t say he had to give in to those regulations in order to get authority for the gulf war. He took pride in it himself.
Insight: What can be done to bring this sort of thing under control?
WAN: There is no effective procedure to stop [the practice of allowing agencies to develop their own rules] other than to pass a new bill that withdraws regulation that already has been proposed, drafted and implemented by the regulatory agency.
;I think we have to sort out this whole delegation issue much better than we have been doing. I think we have to grant [the power to] individual members of Congress to force a floor vote on any regulation coming from an agency that, by itself, has not been specifically approved by Congress.
Right now, unfortunately, Congress is rather happy about the status quo because it can pass bills with good-sounding legislative language — which the legislators take credit for — then turn any problem over to the agencies to come up with the actual rules. That lets our elected lawmakers complain and posture about the high costs and irritation caused by the rules the agencies have put into effect with the permission of Congress, so they’ve got it both ways. They can say to the environmental and safety groups, "Well, I did what I could." Then they can tell the business community or the property-rights people, "Well, yes, the costs are too high and I tried to stop it."
Insight: What can be done about airport security during the terrorist crisis without permanently increasing the federal government’s powers?
WAN: Of course there’s been a lot of talk about federalizing security at airports. Much of that is careless talk. Security at airports is regulated by the feds though the employees typically are private or employed by some state airport authority. But whether they’re federal employees or private employees shouldn’t be the issue. Most of the security people in European airports — where the security is a lot better than it is here — are private employees.
There is no reason to presume that federal employees are going to be that much better than private employees. But there is a problem with giving local airport authorities an incentive to hire people at not much more than the minimum wage. This means there’s a high turnover and, therefore, an awful lot of relearning that has to be done all the time.
The way to solve this problem is to make airport authorities liable for problems. All they did in the Logan International Airport cases [the terrorists who flew the planes into the World Trade Center towers took off on flights out of Logan Airport in Boston] was to fire a security guard.
Logan Airport itself was in no way financially liable for the fact that two airplanes were allowed to take off from that airport with terrorists aboard. If you make individual airports liable for breaches of security, they’ll have a much better incentive to hire effective security people.
Insight: How was Bill Clinton’s regulatory record?
WAN: In retrospect, it was pretty good. It certainly was better than that of the senior George Bush — but only because the GOP conservatives blocked new regulatory legislation during most of the time Clinton was in office.
Clinton overreached. He would have enormously regulated the health-care sector in 1993 if the Hillary health-care plan had passed. And Clinton proposed energy price measures in 1993. Then the conservative Republicans won control of the House in 1994. Most of the regulatory problems he created for the rest of his time in the White House were a result of the regulations [he put into effect] during the last few days, even the last few hours, of his administration. Clinton held up a lot of these very costly regulations until he could leave the consequences to be dealt with by his successor.
Insight: In the introduction to the essays on these issues in Regulation, which is Cato’s review of business and government, you mention how difficult it is for Congress or the president to deal with an agency that’s determined to exert its authority and create new powers for itself. How can a rogue agency be brought into line?
WAN: There is a process in place and it has been there since the Reagan years. It gives OMB the authority to review and stop any regulation coming from an agency which doesn’t meet a set of quite reasonable standards.
There was an executive order from Reagan which set up this power and one from Bill Clinton that confirmed it. The Clinton executive order was almost as good as the Reagan one. That wasn’t the problem. The problem was that Clinton wasn’t interested in enforcing it.
Stephen Goode is a senior writer for Insight.
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